Korean steel manufacturer POSCO has announced it will offer up its 12.5 per cent share in Roy Hill Holdings as collateral for the massive Pilbara iron ore project as moves to raise $7 billion in equity continue.
POSCO said the collateral, valued at 1.49 trillion won ($1.4 billion), would be offered to export credit agencies in Korea, Japan and the US and to other companies.
Gina Rinehart’s $10 billion Roy Hill iron ore development is undertaking one of the largest debt-raisings ever attempted in the mining sector, seeking $4 billion in funding from export credit agencies and an additional $3 billion from commercial bank.
The Roy Hill project includes a new 55 million tonne per annum iron ore mine, 344 kilometres of railway and a new port at Port Hedland.
Roy Hill said it is pushing to complete financing before the year is out, with production scheduled to commence in September 2015.
Construction of the Pilbara-based project is continuing, despite chatter around delays, with some analysts predicting full production will not commence until 2017.
"Roy Hill's project development has not been delayed, we remain fully on track," a company spokesman said on Saturday.